Emancipation

“Reform and opening” started from the top with the seminal leadership transition from Mao to Deng. Deng Xiaoping heralded China’s boom in late 1978 when he called for experiments with “economic democracy” and “emancipation” from orthodox ideas. But the boom was not simply a top-down, state-orchestrated phenomenon. In fact, the biggest contribution of the state, especially in the first phase of growth, was to get out of the way. Farmers were liberated from collectives, sparking a wildfire of capitalism in the countryside. Urban markets and industry were freed to “grow out of the plan,” making profits on surplus production and creating powerful incentives for rapid growth.

For 800 Million People, It Was a Huge Bang

The Birth of Private Workers, The Death of People’s Communes

Li Cheng

Li Cheng is director of research and a senior fellow at the John L. Thornton China Center at the Brookings Institution in Washington, DC. Dr. Li is also a director of the National Committee on U.S.-China Relations. Dr. Li grew up in Shanghai during the Cultural Revolution. In 1985 he came to the United States, where he received an MA in Asian Studies from the University of California, Berkeley and a Ph.D. in Political Science from Princeton University. From 1993 to 1995, Dr. Li worked in China as a fellow with the U.S.-based Institute of Current World Affairs, observing grassroots changes in his native country and interviewing political and business leaders as well as people from all walks of life. Based on this experience, he published a nationally acclaimed book, Rediscovering China: Dynamics and Dilemmas of Reform (1997).

I would divide the history into three periods. The first is the rural reform from 1978 to 1984. It marked the rise of TVEs, towns and villages became driving forces for China’s development. At the time, the gap between the income of urban and rural areas was trimmed down to 1.8 times from 2.5 times. Chinese farmers benefited the most from that change. The second period is from 1984 to the end of the 1990s, about 15 or 16 years. That was urban reform and Deng Xiaoping’s journey to the south accelerated that process. The gap between rural and urban China now had been increased and reached a very high gap. People in urban China all benefited from these changes. Foreign trade accelerated, rural immigration reached a high peak, particularly China participated global economy, which is very dynamic. Since the beginning of this century, the next level is really the coming of age of China. China’s development became a reality starting in 2001 or 2002. It is really a geo-political economic shift. The rise of China is something similar to the rise of Europe in the 17th century, or the rise of America in late 19th and early 20th century, these major geo-political shifts. Now, China is entering the fourth period for economic development, returning to the rural areas.